US wheat futures gave back all of Fridays gains overnight. A short week, good growing conditions in the US and an overall lack of desire on the part of the speculator to wave his wallet around while the US and China decide who has the smallest…. hands… is stifling grain markets at present. As the US dollar strengthens as punters look for a safe haven to park their US dollars we see other majors weaken. The Aussie dollar included.
Overnight the punters saw no way out of a deepening trade dispute between the US and China, the US and Mexico, the US and Canada, can you see the common theme here. The trade disputes being generated by the US are risking a global downturn in growth and this is expected to dominate the RBA interest rate decision today. No one is expecting anything else from the RBA but for rates to remain unchanged. The AUD is weaker this morning, not weak enough to counter all the downside in US wheat futures but it is always good to see some downside, it’s not like you were going to rush out and buy that new header to keep in front of this years wheat harvest anyway.
After the close the weekly USDA crop condition report came out. Winter wheat is unchanged but harvest is now pegged at 51%, bang on the same as this time last year. The spring wheat G/E rating was unchanged. Corn and soybean ratings were back 1% but with a lot of the corn now silking and sitting in mud there’s not much of an overall threat to the row crops. Cotton ratings improved 1%.
Some rain is expected across S.Russia, typical now the headers are out.